iPhone X So Expensive In India "You Can Fly To Hong Kong, Buy It, Come Back And Save Money"

One day after the most anticipated Apple product launch in 10 years, several problems have emerged for the much hyped iPhone X, face-recognition demo flop notwithstanding: it will be substantially delayed confirming all earlier reports of supply-chain bottlenecks, and it will be expensive, perhaps prohibitively so. The introductory prices of the iPhone 8 and the iPhone 8 Plus have gone up compared to the prices of the iPhone 7 and the iPhone 7 Plus. The iPhone X, meanwhile, will price in the 4 digits well equipped. Addressing this issue, the WSJ has a front page article titled "Apple’s New iPhones Gamble on Allure of Premium Pricing."

In one place that gamble may prove insurmountable. As India Today writes, when it goes on sale in India on November 3, the iPhone X will cost Rs 89,000 for the 64GB version. The top-end variant with 256GB is going to cost Rs 102,000. "In other words, this is one expensive phone, although you can say that the iPhone has always been expensive."

To demonstrate just how expensive, on a purchase price parity basis, the iPhone X will be in India, India Today writes that "the other thing that you can say about the iPhone X is that it is cheaper in some other places. As it always happens, the market where the iPhone X is going to be the cheapest is probably Hong Kong." 

In fact, the iPhone X is so expensive in India, and so cheap in Hong Kong, that you can go Hong Kong, buy the phone, and come back and yet save some money. And this includes the cost of flight ticket to Hong Kong. Just see the math."

 

iPhone X (256GB) in India: Rs 102,000

 

iPhone X (256GB) in Hong Kong: Hong Kong Dollar 9,888. This means using the current exchange rate, in Indian currency the price is Rs 80,999.

 

What does this mean? It is cheaper to go to Hong Kong and buy the iPhone X 256Gb variant there.

 

The iPhone X will be available from November 3. Now, if you book your flight to Hong Kong today, the cheapest flight in the first week of November that you can book from Indian will cost around Rs 20,000. If you book a flight from Kolkata, you can get a return ticket to Hong Kong for little over rs 17,000. From Bangalore it is around Rs 19,000. From Delhi, around Rs 20,000. From Mumbai it is a little more expensive.

Flight ticket: Air Asia Rs 17,800

iPhone X 256GB: 80,999
Some other expenses: Around Rs 2000 to Rs 3000
Total: Around Rs 1 lakh
Money saved: Around Rs 2000

The report's conclusion:

Now, we know the whole thing sounds like a joke. And in a way it is. No one is going to go specifically to Hong Kong from India to buy the iPhone. Also, it works best with the 256GB variant. But it does show the ridiculousness of the iPhone prices. and particularly the iPhone X prices, in India. Is it because Apple can't price the iPhone any cheaper? Is it because Apple wants big profit margins? Is it because of Indian government taxes? Is it because Apple wants to keep the iPhone prices high so that it continues to a status symbol in India? We don't know. Only Apple can answer these questions, if it wishes to answer them.

For now Apple is ignoring these, and various other pressing questions - including the whole animated poop emoji. Overnight Doug Kass released the following assessment of why this time Apple may have gone too far:

Apple continues to deliver an expensive smartphone relative to its peers, with many features that are already available from its competition and most of which were anticipated, including face recognition, a full-screen interface and no home button.

 

The only exception to reality versus anticipation was the later-than-expected availability, which is toward the end of the year (orders will be accepted on Oct. 27 and deliveries are slated for Nov. 3). As a result, analysts could take 3 million to 4 million iPhones out of their December quarter projections and reduce full-year 2018 estimates by about $0.40 a share.

 

However, the new Apple phone will provide an animated poop emoji so you can talk crap to your friends.

 

The starting price for the 64GB model of the iPhone X is $999 and $1,149 for the 256GB model. The Apple smartphone continues to be a high-priced aspirational product accompanied by a remarkably effective marketing effort that is stretching its status symbol appeal. However, I see little incremental to the latest product offerings, leaving room for disappointment relative to optimistic expectations. (It is why I initiated an Apple put position yesterday morning and added to that position when the stock was up $2 early in the afternoon).

 

The expectations of an Apple replacement super-cycle accompanied by higher unit volumes and much higher average selling prices, leading to expectations of a "hockey stick" of earnings growth in the coming fiscal year coupled with a general confidence in sustainable growth from there, have spurred a rise of more than 50% in Apple's one-year forward price/earnings multiple in the last 1 1/2 years.

 

I clearly have underestimated the strength of and the confidence in the Apple franchise over the last year. Recognition of this has led me to maintain more of a trading-oriented short position, whereas years ago I had more of an investment short position, which proved successful. Nevertheless, I continue to believe that these aggressive "going forward" expectations for Apple and the company's current valuation remain too ambitious.

But the biggest threat facing the iPhone and perhaps the entire Apple business model, is if its products are no longer perceived as the pinnacle of "coolness." And while it is too early to conclude either way, following yesterday's disappointing and badly leaked release, many appear to be taking aim at Apple not as the source of brilliant Steve Jobsian innovation and "hipness", but as the target of mockery, scorn and humor. Indeed, as one readers suggested, "The bloom may be coming off the rose.  Even folks in the twittersphere piling on.  In the past there was such a halo around apple, nobody would make fun of them.  Now it seems the opposite."

Iis the idol worship coming to an end? According to these widely publicized reactions to the iPhone release, the answer appears to be yes.

Comments

Looney Wed, 09/13/2017 - 12:01 Permalink

  The next financial crisis might be caused by the “allure of premium-priced” Smartphones. At first, banks start offering 30-year phone loans – phortgages. Then, phortgages are commoditized, collateralized, and sold to a Greater Fool. Defaults soar, creating a brand new industry of Phone Repossessors. Banks re-package the defaulted Phortgages and sell them as AAA-rated synthetic PBSs (phortgage-backed securities). Finally, a major bank defaults under the weight of the Phony PBSs, and the whole financial system grinds to a halt. The government steps in and bails it out. The Fed prints quadrillions. Millions of former smartphone owners resort to leasing old rotary phones and live happily ever after, until the next Crisis.   ;-) Looney

mkkby yogibear Wed, 09/13/2017 - 14:47 Permalink

Apple should auction them off. Keep the supply restricted like debeers does with diamonds.

$10,000 for the phone. No problem. Just 100 a month for 100 months. Easy even for poor people on welfare. Low interest rate if you let apple take your welfare payment electronically.

If idiots think a god damned phone is so important, let them pay through the nose. Fuck 'em.

In reply to by yogibear

RAT005 robertsgt40 Wed, 09/13/2017 - 15:14 Permalink

The Galaxy Note 3 was a masterpiece many years ahead of it's time.  Large display, 32gb of RAM, 4K video, beautiful camera, stylus, micro SD card, replacable battery.  I don't think any newer phone is really noticeably better.  You can buy them used for $225.  Just need to be careful about getting a good operating system.

In reply to by robertsgt40

fx RAT005 Wed, 09/13/2017 - 15:30 Permalink

FaceID and animated poop emojis. LOL exactly what the world needs.I understand the desire to escape reality by "augmenting" it or by going straight into fully artificial "reality". Just don't tell me that all this means progress, enhances productivity or advances society. Quite to the contrary.A rotten apple, anyone?

In reply to by RAT005

fx old naughty Wed, 09/13/2017 - 15:42 Permalink

I remember that the Tata Nano (a small car, for those who don't know it) was launched for 1 lakh.Anyway, those who can afford this nonsense of a smartphone could as well pay 2 lakh. Everybody else couldn't care less anyway. The majority of Indians will never see one lakh in their bank accounts in their lifetime (in current rupees, that is. Modi, the crook-in-chief  will inflate the rupee like mad, mark my words)

In reply to by old naughty

Anteater Looney Wed, 09/13/2017 - 12:30 Permalink

Cellphone repossessors might be more challenged, breakinginto your bedroom at 2AM with their 'find my lost cell' app.I'm betting your face recognition and constant GPS locationis how they'll do it. Shame you in Starbucks, two big mercs,one yelling 'put both your hands where I can see them!' andthe other picking up your i-X with latex gloves, ha,ha,ha,while the muppie prairie dogs pop up over the transom.Bag 'em and tag 'em! Yes, a new growth industry and ifthey can tie i-X buys to student loans, oh, boy, howdie!!

In reply to by Looney

Panic Mode Wed, 09/13/2017 - 12:08 Permalink

iPhone Ass. $1k+ phone and still can't extend memory storage.Apple is doing what Nike does, trying to make the poor & uneducated class fighting for the trainers than getting properly fed.

mkkby Wang Dang SP Wed, 09/13/2017 - 15:01 Permalink

The phone is obsolete already. In a few months LTE 5 will be coming out. Your expensive toy won't have an LTE 5 modem, because they don't exist yet.

So next year, all these herd followers will be embarrassed to be seen with their ugly old toy that doesn't get the fastest download speeds.

Dude, you must be po white trash. Sad that you can't afford the cool one I've got, snicker snicker.

In reply to by Wang Dang SP

lasvegaspersona Wed, 09/13/2017 - 12:11 Permalink

Apple 'went too far' years ago.They ignore customers, their concerns and complaints, they do weird, unexpected, inexplicable stuff without explanation, they are impossible to contact...AND they are run by a group of self absorbed,  insulated echo chamber dwellers who have no clue that they are not in touch with reality or even the beliefs of the general public.Maybe they do it 'for the planet'?

Anteater gatorengineer Wed, 09/13/2017 - 12:23 Permalink

Flights in Asia are dirt cheap. Americans take it up the ass.Huawei cell phones are just as good as i-X and cost <$250,but the Big Four cell monopolies will never let you have aHuawei. Next vacation, blow off Fort Lauderdale, and takea two-week trip to Singapore. Cleaner, better food and areal eye-opener how fucked in the ass hard you are beingby US Corporate:State Socialism in the 'Land of the Free',where nothing is free, and costs 3x more than anywhere!Seriously! Before you expat, you'll think how can I ever go,but after you're there, you think, how can I ever go back?!$40,000 marble tile floor beach condos? Hello!? WTF UP!!That's less than a fully-decked F150 piece of plastic shit.

In reply to by gatorengineer

Tiritmenhrta Wed, 09/13/2017 - 12:15 Permalink

It doesn't surprise me at all, that's typical Apple. Don't take me wrong, I use macintosh for more than 20 years and I like it very much, but on the business side, Apple was always "asshole".They have most probably the most loyal customers, but they don't hesitate a second to rip them off at every occasion. As I wrote, that's Apple ...

HRClinton Wed, 09/13/2017 - 12:23 Permalink

If these shitheads from India had brains, they would not buy any smartphone. Failing that, they'd buy last year's model.Failing that, they'd fly to HK and use the savings to buy gold.If you then store the bullion in a private storage facility in .sg, that Simon Black used to flog (instead of keeping it at 'home'), then you pay monthly rent to a nice gentleman from .il

2ndamendment Wed, 09/13/2017 - 12:21 Permalink

Here's an idea. Let Apple price their crappy phone for whatever they want and let demand dictate whether people buy or let it sit on the shelves. If you dont like the price but want an apple phone, go buy the Iphone 6s for ~$150 new. 

Stinkytofu (not verified) Wed, 09/13/2017 - 12:20 Permalink

"Money saved: Around Rs 2000" at current exchange rate, Rs 2000 = US$ 31 ...and at the local china mobile shop (and probably india mobileor whatever they have there), you can buy a new 4G fullyfunctional smart phone (lenovo brand in china).....for $30!